Northwestern Mutual tower's taxes could pay for road work

The property taxes generated by Northwestern Mutual Life Insurance Co.'s planned downtown office tower could finance up to $17 million in nearby road work, and other public improvements.

That's according to the newly disclosed financing proposal, which will undergo its first public review on Thursday, at a city Redevelopment Authority board meeting.

Northwestern Mutual in December announced plans to build the office tower, with 30 to 35 stories and an estimated price tag of $300 million to $350 million, after demolishing its 16-story office building south of E. Mason and east of N. Cass streets.

Under a proposed tax incremental financing district, Northwestern Mutual would recover 70% of the new building's annual property tax bills until those funds totaled $48 million to $50 million.

The proposal also calls for using the new office building's property taxes to pay for up to $17 million in road work and other public improvements.

Possible projects include rebuilding E. Clybourn St. into a boulevard from N. Van Buren St. to
N. Harbor Drive, and building a pedestrian bridge from the site of the Downtown Transit Center, where developer Rick Barrett hopes to build the Couture apartment and hotel high-rise, across Lincoln Memorial Drive to a new urban park next to Discovery World.

Both projects were recommended in 2011 by the Long-Range Lakefront Planning Committee to help improve the area near O'Donnell Park, and spark more lakefront development.

The tax financing district would be dissolved after an estimated 25 years, according to the Department of City Development. Once that occurred, all of the new building's property taxes would go to the city, Milwaukee Public Schools and other local governments.

The tax financing district will need Common Council approval. With project spending totals as high as $67 million, it would be Milwaukee's largest such district.

Mayor Tom Barrett says the financing plan would ensure that Northwestern Mutual makes its investment and retains 1,100 jobs, and adds 1,700 family-supporting jobs downtown. The company has 3,600 downtown employees, including 1,100 who work in the building that will be demolished because of its high long-term maintenance costs.

Commercial Real Estate News

For decades, Brookfield's Blue Mound Road has been the Milwaukee area's busiest retail corridor, extending westward from its anchor at Brookfield Square mall to Barker Road.

Now, that landscape is changing, with five major retail projects under construction — including Brookfield Square's latest redevelopment phase, and the Von Maur department store-anchored retail center known as The Corners.

Blue Mound Road features dozens of shopping centers and stand-alone retail buildings on the three-mile stretch between Moorland and Barker Roads. Those buildings have long enjoyed high occupancy rates, said Bruce Westling, principal at NAI MLG Commercial and a veteran retail leasing broker.(12)